The developer behind the Kingdom Tower, set to become the world’s tallest building, has secured new funding to complete its construction.

Kingdom Holding, the Saudi developer controlled by Prince Al Waleed bin Talal, said yesterday that a 8.4 billion Saudi Arabian riyal (US$2.23bn) fund has been established to pay for remaining work on its long-delayed $1.2bn Kingdom Tower project in Jeddah.

In a statement on Kingdom’s website the firm said that its affiliate, Jeddah Economic Company, had signed a deal with the Saudi bank Alinma Investment to enable the real estate fund to finish the tower. The company said that 26 of the planned 252 floors of the tower had been completed by contractor Saudi Binladin Group (SBL).

The tower would overtake the 828-metre Burj Khalifa in Dubai as the world’s tallest building when it is expected to be completed in 2018.

Kingdom said that the fund – the Alinma Jeddah Economic City Fund – would be financed by Alinma Bank, while Jeddah Economic Company will be the master developer drawing on the fund’s credit lines.

“This agreement with Alinma is part of Jeddah Economic Company’s drive to diversify its sources of funding for Jeddah Tower and Jeddah Economic City,” said Prince Al Waleed. “Our cooperation with the banking sector is a manifestation of just how strongly we believe in this ambitious project.”

Last week reports emerged that SBL plans to cut about 15,000 staff.

In September, the Saudi royal court announced that SBL had been temporarily suspended from taking new contracts after a crane collapsed on to Mecca’s Grand Mosque, killing 107 people.

The news also comes as the Saudi construction market continues to slow as low oil prices put pressure on government to cut spending.

Saudi construction projects have also come under pressure from labour market reforms introduced in 2011, designed to push more Saudi citizens into private-sector jobs, which are making it more difficult for construction firms to hire foreign workers.